Cover Page
Cover Page - shares | 9 Months Ended | |
Jun. 30, 2022 | Aug. 02, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | HENNESSY ADVISORS, INC. | |
Entity Central Index Key | 0001145255 | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Address, State or Province | CA | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding | 7,482,188 | |
Document Transition Report | false | |
Document Quarterly Report | true | |
Entity Address, Address Line One | 7250 Redwood Boulevard, Suite 200 | |
Entity Address, City or Town | Novato | |
Entity File Number | 001-36423 | |
Entity Tax Identification Number | 68-0176227 | |
City Area Code | 415 | |
Local Phone Number | 899-1555 | |
Entity Address, Postal Zip Code | 94945 | |
Entity Incorporation, State or Country Code | CA | |
Common Class A [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | HNNA | |
Title of 12(b) Security | Common stock, no par value | |
Security Exchange Name | NASDAQ | |
4.875% Notes due 2026 [Member] | ||
Document Information [Line Items] | ||
Trading Symbol | HNNAZ | |
Title of 12(b) Security | 4.875% Notes due 2026 | |
Security Exchange Name | NASDAQ |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Current assets | ||
Cash and cash equivalents | $ 57,480 | $ 15,836 |
Investments in marketable securities, at fair value | 10 | 10 |
Investment fee income receivable | 2,168 | 2,795 |
Prepaid expenses | 536 | 788 |
Other accounts receivable | 283 | 277 |
Total current assets | 60,477 | 19,706 |
Property and equipment, net of accumulated depreciation of $2,005 and $1,850, respectively | 312 | 311 |
Operating lease right-of-use asset | 740 | 1,010 |
Management contracts | 80,643 | 80,643 |
Other assets | 200 | 235 |
Total assets | 142,372 | 101,905 |
Current liabilities | ||
Accrued liabilities and accounts payable | 2,743 | 4,151 |
Operating lease liability | 365 | 359 |
Income taxes payable | 424 | 1,050 |
Total current liabilities | 3,532 | 5,560 |
Notes payable, net of issuance costs | 38,799 | |
Long-term operating lease liability | 372 | 646 |
Net deferred income tax liability | 13,690 | 12,437 |
Total liabilities | 56,393 | 18,643 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Common stock, no par value, 22,500,000 shares authorized; 7,482,128 shares issued and outstanding as of June 30, 2022, and 7,469,584 as of September 30, 2021 | 20,954 | 19,964 |
Retained earnings | 65,025 | 63,298 |
Total stockholders' equity | 85,979 | 83,262 |
Total liabilities and stockholders' equity | $ 142,372 | $ 101,905 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation | $ 2,005 | $ 1,850 |
Common stock, no par value | $ 0 | $ 0 |
Common stock, shares authorized | 22,500,000 | 22,500,000 |
Common stock, shares issued | 7,482,128 | 7,469,584 |
Common stock, shares outstanding | 7,482,128 | 7,469,584 |
Statements of Income
Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue | ||||
Total revenue | $ 6,909 | $ 8,527 | $ 23,188 | $ 24,250 |
Operating expenses | ||||
Compensation and benefits | 1,987 | 2,330 | 6,360 | 6,686 |
General and administrative | 1,227 | 1,124 | 3,790 | 3,564 |
Mutual fund distribution | 117 | 118 | 450 | 359 |
Sub-advisory fees | 1,195 | 1,863 | 4,642 | 5,452 |
Depreciation | 52 | 56 | 155 | 181 |
Total operating expenses | 4,578 | 5,491 | 15,397 | 16,242 |
Net operating income | 2,331 | 3,036 | 7,791 | 8,008 |
Interest expense | 562 | 1,560 | ||
Other income | (17) | (1) | (20) | (2) |
Income before income tax expense | 1,786 | 3,037 | 6,251 | 8,010 |
Income tax expense | 485 | 793 | 1,435 | 2,107 |
Net income | $ 1,301 | $ 2,244 | $ 4,816 | $ 5,903 |
Earnings per share | ||||
Basic | $ 0.17 | $ 0.3 | $ 0.64 | $ 0.8 |
Diluted | $ 0.17 | $ 0.3 | $ 0.63 | $ 0.8 |
Weighted average shares outstanding | ||||
Basic | 7,480,796 | 7,364,716 | 7,477,372 | 7,361,165 |
Diluted | 7,577,134 | 7,431,925 | 7,548,851 | 7,387,356 |
Cash dividends declared per share | $ 0.14 | $ 0.14 | $ 0.41 | $ 0.41 |
Investment advisory fees [Member] | ||||
Revenue | ||||
Total revenue | $ 6,375 | $ 7,903 | $ 21,499 | $ 22,458 |
Shareholder service fees [Member] | ||||
Revenue | ||||
Total revenue | $ 534 | $ 624 | $ 1,689 | $ 1,792 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | 2018 Dividend Reinvestment And Stock Purchase Plan [Member] | 2021 Dividend Reinvestment And Stock Purchase Plan [Member] | Common Stock [Member] | Common Stock [Member] 2018 Dividend Reinvestment And Stock Purchase Plan [Member] | Common Stock [Member] 2021 Dividend Reinvestment And Stock Purchase Plan [Member] | Retained Earnings [Member] |
Beginning balance at Sep. 30, 2020 | $ 78,178 | $ 18,705 | $ 59,473 | ||||
Beginning balance, Shares at Sep. 30, 2020 | 7,356,822 | ||||||
Net income | 1,773 | 1,773 | |||||
Dividends declared | (1,011) | (1,011) | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan | $ 6 | $ 6 | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan, Shares | 652 | ||||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | 19 | $ 19 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan, Shares | 2,165 | ||||||
Stock-based compensation | 352 | $ 352 | |||||
Ending balance at Dec. 31, 2020 | 79,317 | $ 19,082 | 60,235 | ||||
Ending balance, shares at Dec. 31, 2020 | 7,359,639 | ||||||
Beginning balance at Sep. 30, 2020 | 78,178 | $ 18,705 | 59,473 | ||||
Beginning balance, Shares at Sep. 30, 2020 | 7,356,822 | ||||||
Net income | 5,903 | ||||||
Ending balance at Jun. 30, 2021 | 82,186 | $ 19,846 | 62,340 | ||||
Ending balance, shares at Jun. 30, 2021 | 7,366,649 | ||||||
Beginning balance at Dec. 31, 2020 | 79,317 | $ 19,082 | 60,235 | ||||
Beginning balance, Shares at Dec. 31, 2020 | 7,359,639 | ||||||
Net income | 1,886 | 1,886 | |||||
Dividends declared | (1,012) | (1,012) | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan | $ 3 | $ 7 | $ 3 | $ 7 | |||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan, Shares | 306 | 838 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | 19 | $ 19 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan, Shares | 2,298 | ||||||
Stock-based compensation | 351 | $ 351 | |||||
Ending balance at Mar. 31, 2021 | 80,571 | $ 19,462 | 61,109 | ||||
Ending balance, shares at Mar. 31, 2021 | 7,363,081 | ||||||
Net income | 2,244 | 2,244 | |||||
Dividends declared | (1,013) | (1,013) | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan | 13 | $ 13 | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan, Shares | 1,424 | ||||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | 20 | $ 20 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan, Shares | 2,144 | ||||||
Stock-based compensation | 351 | $ 351 | |||||
Ending balance at Jun. 30, 2021 | 82,186 | $ 19,846 | 62,340 | ||||
Ending balance, shares at Jun. 30, 2021 | 7,366,649 | ||||||
Beginning balance at Sep. 30, 2021 | 83,262 | $ 19,964 | 63,298 | ||||
Beginning balance, Shares at Sep. 30, 2021 | 7,469,584 | ||||||
Net income | 1,913 | 1,913 | |||||
Dividends declared | (1,027) | (1,027) | |||||
Employee restricted stock vested | 0 | 0 | |||||
Employee restricted stock vested, Shares | 10,000 | ||||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan | 2 | $ 2 | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan, Shares | 193 | ||||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | 19 | $ 19 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan, Shares | 1,729 | ||||||
Stock-based compensation | 388 | $ 388 | |||||
Employee restricted stock forfeiture | (3) | $ (3) | |||||
Repurchase of vested employee restricted stock for tax withholding, Shares | (3,458) | ||||||
Repurchase of vested employee restricted stock for tax withholding | (37) | $ (31) | (6) | ||||
Ending balance at Dec. 31, 2021 | 84,517 | $ 20,339 | 64,178 | ||||
Ending balance, shares at Dec. 31, 2021 | 7,478,048 | ||||||
Beginning balance at Sep. 30, 2021 | 83,262 | $ 19,964 | 63,298 | ||||
Beginning balance, Shares at Sep. 30, 2021 | 7,469,584 | ||||||
Net income | 4,816 | ||||||
Repurchase of vested employee restricted stock for tax withholding | (37) | ||||||
Ending balance at Jun. 30, 2022 | 85,979 | $ 20,954 | 65,025 | ||||
Ending balance, shares at Jun. 30, 2022 | 7,482,128 | ||||||
Beginning balance at Dec. 31, 2021 | 84,517 | $ 20,339 | 64,178 | ||||
Beginning balance, Shares at Dec. 31, 2021 | 7,478,048 | ||||||
Net income | 1,602 | 1,602 | |||||
Dividends declared | (1,028) | (1,028) | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan | 1 | $ 1 | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan, Shares | 64 | ||||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | $ 19 | $ 19 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan, Shares | 1,952 | ||||||
Stock-based compensation | 295 | $ 295 | |||||
Employee restricted stock forfeiture | (12) | (12) | |||||
Ending balance at Mar. 31, 2022 | 85,394 | $ 20,642 | 64,752 | ||||
Ending balance, shares at Mar. 31, 2022 | 7,480,064 | ||||||
Net income | 1,301 | 1,301 | |||||
Dividends declared | (1,028) | (1,028) | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan | 1 | $ 1 | |||||
Shares issued for auto-investments pursuant to the 2018(2021) Dividend Reinvestment and Stock Purchase Plan, Shares | 145 | ||||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan | 20 | $ 20 | |||||
Shares issued for dividend reinvestment pursuant to the 2021 Dividend Reinvestment and Stock Purchase Plan, Shares | 1,919 | ||||||
Stock-based compensation | 291 | $ 291 | |||||
Ending balance at Jun. 30, 2022 | $ 85,979 | $ 20,954 | $ 65,025 | ||||
Ending balance, shares at Jun. 30, 2022 | 7,482,128 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities | ||
Net income | $ 4,816 | $ 5,903 |
Adjustments to reconcile net income to net cash provided by operating activities Depreciation | ||
Depreciation | 155 | 181 |
Unrealized gain on marketable securities | (1) | |
Change in right-of-use asset and operating lease liability | 2 | (60) |
Amortization of note issuance costs | 192 | |
Deferred income taxes | 1,253 | 882 |
Deferred offering costs | (7) | |
Stock-based compensation | 974 | 1,054 |
Employee restricted stock forfeiture | (15) | |
Change in operating assets and liabilities | ||
Investment fee income receivable | 627 | (418) |
Prepaid expenses | 252 | 309 |
Other accounts receivable | (6) | 18 |
Other assets | 35 | (10) |
Accrued liabilities and accounts payable | (1,408) | (435) |
Income taxes payable | (626) | (202) |
Net cash provided by operating activities | 6,251 | 7,214 |
Cash flows from investing activities | ||
Purchases of property and equipment | (156) | (182) |
Net cash used in investing activities | (156) | (182) |
Cash flows from financing activities | ||
Proceeds from issuance of notes, net of underwriting discount | 39,042 | |
Payment of issuance costs on notes | (435) | |
Repurchase of vested employee restricted stock for tax withholding | (37) | |
Dividend payments | (3,025) | (2,978) |
Net cash provided by (used in) financing activities | 35,549 | (2,949) |
Net increase in cash and cash equivalents | 41,644 | 4,083 |
Cash and cash equivalents at the beginning of the period | 15,836 | 9,955 |
Cash and cash equivalents at the end of the period | 57,480 | 14,038 |
Supplemental disclosures of cash flow information: | ||
Cash paid for income taxes | 810 | 1,427 |
Cash paid for interest | 1,368 | 0 |
Dividend reinvestment issued in shares | 58 | 58 |
2018 Dividend Reinvestment And Stock Purchase Plan [Member] | ||
Cash flows from financing activities | ||
Proceeds from shares issued | 9 | |
2021 Dividend Reinvestment And Stock Purchase Plan [Member] | ||
Cash flows from financing activities | ||
Proceeds from shares issued | $ 4 | $ 20 |
Basis of Financial Statement Pr
Basis of Financial Statement Presentation | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Financial Statement Presentation | The preparation of financial statements requires management to make estimates and assumptions. Making estimates requires management to exercise significant judgment. Accordingly, the actual results could differ substantially from those estimates. The Company’s operating activities consist primarily of providing investment advisory services to 16 open-end The Company’s operating revenues consist of contractual investment advisory and shareholder service fees paid to it by the Hennessy Funds. The Company earns investment advisory fees from each Hennessy Fund by, among other things: • acting as portfolio manager for the fund or overseeing the sub-advisor • performing a daily reconciliation of portfolio positions and cash for the fund; • monitoring the liquidity of the fund; • monitoring the fund’s compliance with its investment objectives and restrictions and federal securities laws; • maintaining a compliance program (including a code of ethics), conducting ongoing reviews of the compliance programs of the fund’s service providers (including any sub-advisor), sub-advisor) • if applicable, overseeing the selection and continued employment of the fund’s sub-advisor, sub-advisor’s • overseeing service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the fund; • maintaining in-house • preparing or directing the preparation of all regulatory filings for the fund, including writing and annually updating the fund’s prospectus and related documents; • for each annual report of the fund, preparing or reviewing a written summary of the fund’s performance during the most recent 12-month • monitoring and overseeing the accessibility of the fund on third-party platforms; • paying the incentive compensation of the fund’s compliance officers and employing other staff such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives; • providing a quarterly compliance certification to the Board of Trustees of Hennessy Funds Trust (the “Funds’ Board of Trustees”); and • preparing or reviewing materials for the Funds’ Board of Trustees, presenting to or leading discussions with the Funds’ Board of Trustees, preparing or reviewing all meeting minutes, and arranging for training and education of the Funds’ Board of Trustees. The Company earns shareholder service fees from Investor Class shares of the Hennessy Funds by, among other things, maintaining a toll-free The Company waived a portion of its fees with respect to the Hennessy Energy Transition Fund through the expiration of the fund’s expense limitation agreement on October 25, 2020. The Company continues to waive a portion of its fees with respect to the Hennessy Midstream Fund and the Hennessy Technology Fund to comply with contractual expense ratio limitations. The fee waivers are calculated daily by the Hennessy Funds’ accountants at U.S. Bank Global Fund Services, reviewed by management, and then charged to expense monthly as offsets to the Company’s revenues. Each waived fee is then deducted from investment advisory fee income and reduces the aggregate amount of advisory fees the Company receives from such fund in the subsequent month. To date, the Company has only waived fees based on contractual obligations, but the Company has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going-forward The Company’s contractual agreements for investment advisory and shareholder services prove that a contract exists with fixed and determinable fees, and the services are rendered daily. The collectability is deemed probable because the fees are received from the Hennessy Funds in the month subsequent to the month in which the services are provided. (2) Management Contracts Purchased |
Management Contracts Purchased
Management Contracts Purchased | 9 Months Ended |
Jun. 30, 2022 | |
Text Block [Abstract] | |
Management Contracts Purchased | Throughout its history, the Company has completed 10 purchases of the assets related to the management of 30 different mutual funds, some of which were reorganized into already existing Hennessy Funds. In accordance with Financial Accounting Standards Board (“FASB”) guidance, the Company periodically reviews the carrying value of its management contracts asset to determine if any impairment has occurred. The fair value of the management contracts asset was estimated as of September 30, 2021, by applying the income approach and is based on management estimates and assumptions, including third-party Under Accounting Standards Codification 350 — Intangibles – Goodwill and Other, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment. The Company reviews the useful life of the management contracts each reporting period to determine if they continue to have an indefinite useful life. |
Investment Advisory Agreements
Investment Advisory Agreements | 9 Months Ended |
Jun. 30, 2022 | |
Text Block [Abstract] | |
Investment Advisory Agreements | The Company has investment advisory agreements with Hennessy Funds Trust under which it provides investment advisory services to all classes of the 16 Hennessy Funds. The investment advisory agreements must be renewed annually (except in limited circumstances) by (a) the Funds’ Board of Trustees or the vote of a majority of the outstanding shares of the applicable Hennessy Fund and (b) the vote of a majority of the trustees of Hennessy Funds Trust who are not interested persons of the Hennessy Funds. If an investment advisory agreement is not renewed, it terminates automatically. There are two additional circumstances in which an investment advisory agreement terminates. First, an investment advisory agreement automatically terminates if the Company assigns them to another advisor (assignment includes “indirect assignment,” which is the transfer of the Company’s common stock in sufficient quantities deemed to constitute a controlling block). Second, an investment advisory agreement may be terminated prior to its expiration upon 60 days’ written notice by either the applicable Hennessy Fund or the Company. As provided in each investment advisory agreement, the Company receives investment advisory fees monthly based on a percentage of the applicable fund’s average daily net asset value. The Company has entered into sub-advisory sub-advisory sub-advisory sub-advisor sub-advisors sub-advisory In exchange for the sub-advisory sub-advisory sub-advisors Sub-advisory sub-advised Effective January 31, 2022, the Company and BP Capital Fund Services, LLC mutually agreed to terminate the sub-advisory |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | (4) Fair Value Measurements The Company applies Accounting Standards Codification 820 — Fair Value Measurement for all financial assets and liabilities, which establishes a framework for measuring fair value and expands disclosures about fair value measurements. The standard defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” It also establishes a fair value hierarchy consisting of the following three levels that prioritize the inputs to the valuation techniques used to measure fair value: Based on the definitions, the following tables represent the Company’s assets categorized in the Level 1 to Level 3 hierarchies: June 30, 2022 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 54,116 $ — $ — $ 54,116 Mutual fund investments 10 — — 10 Total $ 54,126 $ — $ — $ 54,126 Amounts included in: Cash and cash equivalents $ 54,116 $ — $ — $ 54,116 Investments in marketable securities 10 — — 10 Total $ 54,126 $ — $ — $ 54,126 September 30, 2021 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 11,554 $ — $ — $ 11,554 Mutual fund investments 10 — — 10 Total $ 11,564 $ — $ — $ 11,564 Amounts included in: Cash and cash equivalents $ 11,554 $ — $ — $ 11,554 Investments in marketable securities 10 — — 10 Total $ 11,564 $ — $ — $ 11,564 There were no transfers between levels during the nine months ended June 30, 2022, or the year ended September 30, 2021. The fair values of receivables, payables, and accrued liabilities approximate their book values given the short-term nature of those instruments. The fair value of the 2026 Notes (see Note 7) was approximately $39.8 million as of June 30, 2022, based on the last trading price of the notes on that date (Level 1). |
Leases
Leases | 9 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Leases | (5) Leases The Company determines if an arrangement is an operating lease at inception. Operating leases are included in operating lease right-of-use long-term long-term right-of-use long-term Right-of-use right-of-use right-of-use The Company’s most significant leases are real estate leases of office facilities. The Company leases office space under non-cancelable month-to-month right-of-use June 30, 2022 (In thousands, except years and percentages) Operating lease right-of-use $ 740 Current operating lease liability $ 365 Long-term operating lease liability $ 372 Weighted average remaining lease term 2.1 Weighted average discount rate 0.90 % For the nine months ended June 30, 2022, total rent expense for all offices, which is recorded under general and administrative expense in the statements of income, totaled $0.4 million. The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows: June 30, 2022 (In thousands) Remainder of fiscal year 2022 $ 93 Fiscal year 2023 374 Fiscal year 2024 286 Total undiscounted cash flows 753 Present value discount (16 ) Total operating lease liabilities $ 737 |
Accrued Liabilities and Account
Accrued Liabilities and Accounts Payable | 9 Months Ended |
Jun. 30, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities and Accounts Payable | (6) Accrued Liabilities and Accounts Payable Details relating to accrued liabilities and accounts payable reflected on the Company’s balance sheet are as follows: June 30, 2022 September 30, 2021 (In thousands) Accrued bonus liabilities $ 1,760 $ 2,738 Accrued sub-advisor 364 628 Other accrued expenses 619 785 Total accrued liabilities and accounts payable $ 2,743 $ 4,151 |
Debt Outstanding
Debt Outstanding | 9 Months Ended |
Jun. 30, 2022 | |
Debt Instruments [Abstract] | |
Debt Outstanding | (7) Debt Outstanding On October 20, 2021, the Company completed a public offering of 4.875% notes due 2026 in the aggregate principal amount of $40,250,000 (the “2026 Notes”), which included the full exercise of the underwriters’ overallotment option. The initial net proceeds received were approximately $38,607,000 after considering the impact of issuance costs and underwriter discounts. The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. The 2026 Notes mature on December 31, 2026. The 2026 Notes are direct unsecured obligations, rank equally in right of payment with any of the Company’s future unsecured unsubordinated indebtedness, senior to any of the Company’s future indebtedness that expressly provides that it is subordinate to the 2026 Notes, effectively subordinate to all of the Company’s existing and future secured indebtedness, and structurally subordinated to all existing and future indebtedness and other obligations of any of the Company’s future subsidiaries. |
Income Taxes
Income Taxes | 9 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (8) Income Taxes The Company’s effective income tax rates for the nine months ended June 30, 2022 and 2021, were 23.0% and 26.3%, respectively. For the nine months ended June 30, 2022, the effective income tax rate was lower than the federal statutory rate due to the recognition of a tax benefit related to a California tax refund of $0.2 million. The Company is subject to income tax in the U.S. federal jurisdiction and various state jurisdictions. As of June 30, 2022, the Company has identified 22 state tax jurisdictions in which it is subject to income tax. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (9) Commitments and Contingencies Other than the operating leases discussed in Note 5, the Company has no commitments and no significant contingencies with original terms in excess of one year. |
Equity
Equity | 9 Months Ended |
Jun. 30, 2022 | |
Federal Home Loan Banks [Abstract] | |
Equity | (10) Equity Amended and Restated 2013 Omnibus Incentive Plan The Company has adopted, and the Company’s shareholders have approved, the Amended and Restated 2013 Omnibus stock-based straight-line A summary of RSU activity is as follows: Nine Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value per Share Non-vested 323,810 $ 8.87 Granted — — Vested (1) (102,958 ) (9.46 ) Forfeited (7,917 ) (8.76 ) Non-vested 212,935 $ 8.58 (1) Represents partially vested RSUs for which the Company already has recognized the associated compensation expense but has not yet issued to employees the related shares of common stock. Additional information related to RSUs is as follows: June 30, 2022 (In thousands, except years) Total expected compensation expense related to RSUs $ 17,117 Recognized compensation expense related to RSUs (15,289 ) Unrecognized compensation expense related to RSUs $ 1,828 Weighted average remaining years to expense for RSUs 2.5 Dividend Reinvestment and Stock Purchase Plan In January 2021, the Company adopted a Dividend Reinvestment and Stock Purchase Plan (the “DRSPP”), replacing the previous Dividend Reinvestment and Stock Purchase Plan that had been in place since 2018. The DRSPP provides shareholders and new investors with a convenient and economical means of purchasing shares of the Company’s common stock and reinvesting cash dividends paid on the Company’s common stock. Under the DRSPP and its predecessor plans, the Company issued 6,002 and 9,827 shares of common stock during the nine months ended June 30, 2022 and 2021, respectively. The maximum number of shares that may be issued under the DRSPP is 1,470,000, of which 1,454,455 shares remained available for issuance as of June 30, 2022. Stock Buyback Program In August 2010, the Company adopted a stock buyback program. The program provides that the Company may repurchase up to 1,500,000 shares of its common stock and has no expiration date. Share repurchases may be made in the open market, in privately negotiated transactions, or otherwise. A total of 596,368 shares remains available for repurchase under the stock buyback program. The Company did not repurchase any shares of its common stock pursuant to the stock buyback program during the nine months ended June 30, 2022. |
Earnings per Share and Dividend
Earnings per Share and Dividends per Share | 9 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share and Dividends per Share | (11) Earnings per Share and Dividends per Share Basic earnings per share is determined by dividing net earnings by the weighted average number of shares of common stock outstanding, while diluted earnings per share is determined by dividing net earnings by the weighted average number of shares of common stock outstanding adjusted for the dilutive effect of common stock equivalents, which consist of restricted stock units (“RSUs”). For the three months ended June 30, 2022 and June 30, 2021, all common stock equivalents were dilutive and therefore included in the diluted earnings per share calculation. For the nine months ended June 30, 2022 and June 30, 2021, the Company exclud stock equivalents, respectively, from the diluted earnings per share calculations because they were not dilutive. In all cases, the excluded common stock equivalents consisted of non-vested RSUs. The Company paid a quarterly cash dividend of $0.1375 per share on June 2, 2022, to shareholders of record as of May 23, 2022. |
Recently Issued and Adopted Acc
Recently Issued and Adopted Accounting Standards | 9 Months Ended |
Jun. 30, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued and Adopted Accounting Standards | (12) Recently Issued and Adopted Accounting Standards The Company has reviewed accounting pronouncements issued between the filing date of its most recent Form 10-K, 10-Q |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | (13) Subsequent Events The Company has evaluated subsequent events through the date these financial statements were issued and has concluded that no material events occurred during this period that require recognition or disclosure. |
Basis of Financial Statement _2
Basis of Financial Statement Presentation (Policies) | 9 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue Recognition | The preparation of financial statements requires management to make estimates and assumptions. Making estimates requires management to exercise significant judgment. Accordingly, the actual results could differ substantially from those estimates. The Company’s operating activities consist primarily of providing investment advisory services to 16 open-end The Company’s operating revenues consist of contractual investment advisory and shareholder service fees paid to it by the Hennessy Funds. The Company earns investment advisory fees from each Hennessy Fund by, among other things: • acting as portfolio manager for the fund or overseeing the sub-advisor • performing a daily reconciliation of portfolio positions and cash for the fund; • monitoring the liquidity of the fund; • monitoring the fund’s compliance with its investment objectives and restrictions and federal securities laws; • maintaining a compliance program (including a code of ethics), conducting ongoing reviews of the compliance programs of the fund’s service providers (including any sub-advisor), sub-advisor) • if applicable, overseeing the selection and continued employment of the fund’s sub-advisor, sub-advisor’s • overseeing service providers that provide accounting, administration, distribution, transfer agency, custodial, sales, marketing, public relations, audit, information technology, and legal services to the fund; • maintaining in-house • preparing or directing the preparation of all regulatory filings for the fund, including writing and annually updating the fund’s prospectus and related documents; • for each annual report of the fund, preparing or reviewing a written summary of the fund’s performance during the most recent 12-month • monitoring and overseeing the accessibility of the fund on third-party platforms; • paying the incentive compensation of the fund’s compliance officers and employing other staff such as legal, marketing, national accounts, distribution, sales, administrative, and trading oversight personnel, as well as management executives; • providing a quarterly compliance certification to the Board of Trustees of Hennessy Funds Trust (the “Funds’ Board of Trustees”); and • preparing or reviewing materials for the Funds’ Board of Trustees, presenting to or leading discussions with the Funds’ Board of Trustees, preparing or reviewing all meeting minutes, and arranging for training and education of the Funds’ Board of Trustees. The Company earns shareholder service fees from Investor Class shares of the Hennessy Funds by, among other things, maintaining a toll-free The Company waived a portion of its fees with respect to the Hennessy Energy Transition Fund through the expiration of the fund’s expense limitation agreement on October 25, 2020. The Company continues to waive a portion of its fees with respect to the Hennessy Midstream Fund and the Hennessy Technology Fund to comply with contractual expense ratio limitations. The fee waivers are calculated daily by the Hennessy Funds’ accountants at U.S. Bank Global Fund Services, reviewed by management, and then charged to expense monthly as offsets to the Company’s revenues. Each waived fee is then deducted from investment advisory fee income and reduces the aggregate amount of advisory fees the Company receives from such fund in the subsequent month. To date, the Company has only waived fees based on contractual obligations, but the Company has the ability to waive fees at its discretion. Any decision to waive fees would apply only on a going-forward The Company’s contractual agreements for investment advisory and shareholder services prove that a contract exists with fixed and determinable fees, and the services are rendered daily. The collectability is deemed probable because the fees are received from the Hennessy Funds in the month subsequent to the month in which the services are provided. (2) Management Contracts Purchased |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Assets Categorized on Basis of Various Levels | Based on the definitions, the following tables represent the Company’s assets categorized in the Level 1 to Level 3 hierarchies: June 30, 2022 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 54,116 $ — $ — $ 54,116 Mutual fund investments 10 — — 10 Total $ 54,126 $ — $ — $ 54,126 Amounts included in: Cash and cash equivalents $ 54,116 $ — $ — $ 54,116 Investments in marketable securities 10 — — 10 Total $ 54,126 $ — $ — $ 54,126 September 30, 2021 Level 1 Level 2 Level 3 Total (In thousands) Money market fund deposits $ 11,554 $ — $ — $ 11,554 Mutual fund investments 10 — — 10 Total $ 11,564 $ — $ — $ 11,564 Amounts included in: Cash and cash equivalents $ 11,554 $ — $ — $ 11,554 Investments in marketable securities 10 — — 10 Total $ 11,564 $ — $ — $ 11,564 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Leases [Abstract] | |
Detailed Information About In Operating Lease Right Of Use Assets Lease Liabilities and Others | The classification of the Company’s operating lease right-of-use |
Schedule Of Operating Lease Maturities | The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet are as follows: June 30, 2022 (In thousands) Remainder of fiscal year 2022 $ 93 Fiscal year 2023 374 Fiscal year 2024 286 Total undiscounted cash flows 753 Present value discount (16 ) Total operating lease liabilities $ 737 |
Accrued Liabilities and Accou_2
Accrued Liabilities and Accounts Payable (Table) | 9 Months Ended |
Jun. 30, 2022 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued liabilities | Details relating to accrued liabilities and accounts payable reflected on the Company’s balance sheet are as follows: June 30, 2022 September 30, 2021 (In thousands) Accrued bonus liabilities $ 1,760 $ 2,738 Accrued sub-advisor 364 628 Other accrued expenses 619 785 Total accrued liabilities and accounts payable $ 2,743 $ 4,151 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Jun. 30, 2022 | |
Federal Home Loan Banks [Abstract] | |
Schedule of Non-Vested Restricted Stock Units Activity | A summary of RSU activity is as follows: Nine Months Ended June 30, 2022 Shares Weighted Average Grant Date Fair Value per Share Non-vested 323,810 $ 8.87 Granted — — Vested (1) (102,958 ) (9.46 ) Forfeited (7,917 ) (8.76 ) Non-vested 212,935 $ 8.58 (1) Represents partially vested RSUs for which the Company already has recognized the associated compensation expense but has not yet issued to employees the related shares of common stock. |
Schedule of Non-Vested Restricted Stock Units Compensation | Additional information related to RSUs is as follows: June 30, 2022 (In thousands, except years) Total expected compensation expense related to RSUs $ 17,117 Recognized compensation expense related to RSUs (15,289 ) Unrecognized compensation expense related to RSUs $ 1,828 Weighted average remaining years to expense for RSUs 2.5 |
Basis of Financial Statement _3
Basis of Financial Statement Presentation - Additional Information (Detail) | 9 Months Ended |
Jun. 30, 2022 Funds | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of Hennessy funds to which company provides investment advisory services | 16 |
Management Contracts Purchased
Management Contracts Purchased - Additional Information (Detail) | Jun. 30, 2022 USD ($) Funds | Sep. 30, 2021 USD ($) |
Contracts In Progress Costs And Earnings [Line Items] | ||
Number of mutual funds | Funds | 30 | |
Management contracts impairment amount | $ | $ 0 | $ 0 |
Investment Advisory Agreements
Investment Advisory Agreements - Additional Information (Detail) | 9 Months Ended |
Jun. 30, 2022 Funds | |
Investment Schedule [Abstract] | |
Number of Hennessy funds to which company provides investment advisory services | 16 |
Notice period for termination of agreement | 60 days |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Categorized on Basis of Various Levels (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market fund deposits | $ 54,116 | $ 11,554 |
Mutual fund investments | 10 | 10 |
Cash and cash equivalents | 54,116 | 11,554 |
Investments in marketable securities | 10 | 10 |
Total | 54,126 | 11,564 |
Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market fund deposits | 54,116 | 11,554 |
Mutual fund investments | 10 | 10 |
Cash and cash equivalents | 54,116 | 11,554 |
Investments in marketable securities | 10 | 10 |
Total | $ 54,126 | $ 11,564 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 9 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Sep. 30, 2021 | |
Transfer from fair value level 1 to level 2 | $ 0 | $ 0 |
Transfer from fair value level 2 to level 1 | 0 | 0 |
Transfer into (out of) level 3 | 0 | $ 0 |
Level 1 [Member] | Notes Payable [Member] | 2026 Notes [Member] | ||
Notes payable fair value | $ 39,800,000 |
Leases - Schedule Of Operating
Leases - Schedule Of Operating Lease Maturities (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Operating lease right-of-use assets | $ 740 | $ 1,010 |
Current operating lease liability | 365 | 359 |
Long-term operating lease liability | $ 372 | $ 646 |
Weighted average remaining lease term | 2 years 1 month 6 days | |
Weighted average discount rate | 0.90% |
Leases - Detailed Information A
Leases - Detailed Information About In Operating Lease Right Of Use Assets Lease Liabilities and Others (Detail) $ in Thousands | Jun. 30, 2022 USD ($) |
Remainder of fiscal year 2022 | $ 93 |
Fiscal year 2023 | 374 |
Fiscal year 2024 | 286 |
Total undiscounted cash flows | 753 |
Present value discount | (16) |
Total operating lease liabilities | $ 737 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Sep. 30, 2021 | |
Additional operating lease term | 3 years | |
Operating lease right-of-use assets | $ 740 | $ 1,010 |
Novato California [Member] | ||
Operating lease expiry date | Jul. 31, 2024 | |
Operating lease right-of-use assets | $ 1,100 | |
General and Administrative Expense [Member] | ||
Operating lease rent payments | $ 400 |
Accrued Liabilities and Accou_3
Accrued Liabilities and Accounts Payable - Summary of accrued expenses reflected on the company's balance sheet (Detail) - USD ($) $ in Thousands | Jun. 30, 2022 | Sep. 30, 2021 |
Accrued Liabilities, Current [Abstract] | ||
Accrued bonus liabilities | $ 1,760 | $ 2,738 |
Accrued sub-advisor fees | 364 | 628 |
Other accrued expenses | 619 | 785 |
Total accrued liabilities and accounts payable | $ 2,743 | $ 4,151 |
Debt Outstanding - Additional I
Debt Outstanding - Additional Information (Detail) - 2026 Notes [Member] - Notes Payable [Member] | Oct. 20, 2021 USD ($) |
Debt Instrument [Line Items] | |
Debt Instrument, Interest rate | 4.875% |
Debt Instrument, Face Amount | $ 40,250,000 |
Debt Instrument, Payment terms | The 2026 Notes bear interest at 4.875% per annum, payable on the last day of each calendar quarter and at maturity, beginning December 31, 2021. |
Proceeds from Debt, Net of issuance costs | $ 38,607,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rates | 23% | 26.30% |
Recognition of tax benefits | $ 0.2 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 9 Months Ended |
Jun. 30, 2022 | |
Commitments And Contingencies Description | Other than the operating leases discussed in Note 5, the Company has no commitments and no significant contingencies with original terms in excess of one year. |
Equity - Additional Information
Equity - Additional Information (Detail) - shares | 1 Months Ended | 9 Months Ended | ||
Aug. 31, 2010 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum common stock issuable under plan | 22,500,000 | 22,500,000 | ||
Stock buyback program [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance under plan | 596,368 | |||
Repurchase of common stock shares | 1,500,000 | |||
Dividend Reinvestment and Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock issued during period shares | 6,002 | 9,827 | ||
Maximum common stock issuable under plan | 1,470,000 | |||
Shares available for issuance under plan | 1,454,455 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share based compensation by share based award term of vesting | 4 years | |||
Rate of restricted stock units vest under plan | 25% |
Equity - Schedule of Non-Vested
Equity - Schedule of Non-Vested Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Non-vested Beginning Balance, Number of Restricted Share Units | shares | 323,810 |
Granted, Number of Restricted Share Units | shares | 0 |
Vested, Number of Restricted Share Units | shares | (102,958) |
Forfeited, Number of Restricted Share Units | shares | (7,917) |
Non-vested Ending Balance, Number of Restricted Share Units | shares | 212,935 |
Non-vested Beginning Balance, Weighted Avg. Fair Value Per Share at Each Date | $ / shares | $ 8.87 |
Granted, Weighted Avg. Fair Value Per Share at Each Date | $ / shares | 0 |
Vested, Weighted Avg. Fair Value per Share at Each Date | $ / shares | (9.46) |
Forfeited, Weighted Avg. Fair Value per Share at Each Date | $ / shares | (8.76) |
Non-vested Ending Balance, Weighted Avg. Fair Value Per Share at Each Date | $ / shares | $ 8.58 |
Equity - Schedule of Non-Vest_2
Equity - Schedule of Non-Vested Restricted Stock Units Compensation (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total expected compensation expense related to RSUs | $ 974 | $ 1,054 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total expected compensation expense related to RSUs | 17,117 | |
Recognized compensation expense related to RSUs | (15,289) | |
Unrecognized compensation expense related to RSUs | $ 1,828 | |
Weighted average remaining years to expense for RSUs | 2 years 6 months |
Earnings per Share and Divide_2
Earnings per Share and Dividends per Share - Additional Information (Detail) - $ / shares | 9 Months Ended | ||
Jun. 02, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | |
Weighted Average Amounts Used In Calculating Earnings Per Share [Line Items] | |||
Dividends paid | $ 0.1375 | ||
Restricted Stock Units (RSUs) [Member] | |||
Weighted Average Amounts Used In Calculating Earnings Per Share [Line Items] | |||
Stock options excluded from diluted earnings per share | 241 | 73,852 |